If your customer says your products are too expensive, here is what you need to say.
You need to understand why people buy something.
“There is a big difference between selling your cost vs selling your values.” says Vinni Balyan, the founder of a green India startup Bonsai Plants in India Abana Homes.
In this cut-throat-competition market, most of the startups find it easy to sell by slashing the price and end up losing on the margin in the end. It’s very difficult to build a sustainable and profitable company where your primary strategy is to beat the competition in pricing. Because, in the end, you’ll end up fighting for the small margin which makes it difficult to survive and scale being a newcomer in the market.
You want to create a brand – not the cheap selling version of your competition. Correct?
Then why are you taking the route where you sacrifice your margin in the name of outperforming your competition?
I asked this questions many times to the entrepreneurs who came to build a brand but end up being a cheap seller of their competition. The unanimous answer I got which is based on a question that the customer asks.
“Your product is as good as your competition but it’s too expensive.”
And trust me, this is the challenge with every new business owner in the market. Here I’ll suggest the ways to overcome this problem and give you a pitch that can help you outsell your competition.
The one key combat arsenal for you is Outstanding Customer Service. It’s worth, it’s unbeatable and it’s a real brand making painful effort.
You need to build your brand by offering the outstanding customer service.
“Fast response, continuity in communication, proactive approach, great quality of products and empathy based customer service. That’s the key to my business and I thrive on my returning customers.” Vinni from Abana Homes comments when asked about what holds her customers.
You can justify your price based on the values that you provide. And remember, values cannot be quantified in the price tag.
For that, you need to understand that why a customer buys something.
- To solve a pain in the present
- To solve a pain in future
- To get the pleasure in the present
- To get the pleasure in future
So you need to find one of these reasons based on your product and service and create your pitch first.
Usually, when we start negotiating with our potential customer, we try to sound not like our competition but we end up using the same terminologies and examples as them.
You need to find where the values are in your business.
Now comes the hardest part of it. What to do when a potential client or customer asks the question of all time: “I can get your product or service from somewhere else. Why should I work with you?”
It’s best to start with “disarming honesty.”
Say something along the lines of, “That’s a great question. But depending on what you’re looking for from a new provider, and depending on your relationship with competitor X, maybe it makes sense that you do nothing and stay with that competitor. Can I make a suggestion? Let me ask you a few very straightforward, tough questions about what you are looking for in a supplier, what challenges you’ve had over the years, and then we can figure out together whether I truly add value. And if we decide together there’s a good fit, then you and I could spend the last five minutes figuring out where we might get started on a business relationship. Does that sound OK?”
Finally, if you notice your competitors are slashing prices, you need to know when to say “no” just as often as you say “yes.
It’s not about competing with everyone else and taking the same route. Your strength lies in your values and understanding what you’re really selling — and being able to effectively communicate that value in a way that puts your cost into perspective.